London faces savings crisis

LONDONERS save less of their monthly income than people in any other part of England and Wales, leaving the capital’s population facing a savings timebomb.

Despite higher average earnings, the capital’s dwellers have the equivalent of just 22 per cent of their annual salary in savings accounts, according to research released this morning by Halifax. That compares to an average of 29 per cent across the whole of the country, and as much as 34 per cent in the east Midlands, Wales and the south west of England.

The average Londoner has a nest egg of only £8,147, with savers in Hackney and Newham sitting on just £4,187 and £4,464 respectively. And the capital’s male population is even worse off – men in London have savings worth an average of just 18 per cent of their annual earnings, while the female average is 30 per cent, dragging the total up.

The male-female divide is clear across all regions, with women’s average balances above those of male savers everywhere except in the north east of England.

“We have seen women consistently out-saving men throughout 2013, both in terms of average balances and in relation to earnings,” said Halifax’s Richard Fearon. “This suggests a fundamental difference in the attitude towards saving between the sexes.”

But while Londoners shun their piggy banks, their neighbours across the south are putting aside more of their incomes – 19 of the 20 local authorities with the largest average savings balances are in the south of England.

Savers in South Buckinghamshire have the highest savings account balances, with an average of £13,429 each, followed by Mole Valley in Surrey with £13,407.

The data comes as fresh house price analysis revealed the capital as the only region in England where house prices have burst past their 2008 peak.

According to Countrywide estate agents prices in London are now 109.3 per cent of their 2008 high – with only 11 local authorities, all of which are in London, seeing real-terms prices rises.

“The gap between the south east of England and the rest of the country continues to widen,” said chief executive Grenville Turner.

“Increases in house prices across London are running at around seven times those outside the capital.”

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